According to the Ministry of Agriculture and Rural Development (MARD), annual processed sugar production of the 2013 - 2014 crop year reaches 1.6 million tonnes, while domestic consumption is only 1.4 million tonnes. Meanwhile, the amount of imported sugar under the commitment with the World Trade Organisation (WTO) is about 77,000 tonnes plus the inventory sugar from last year and sugar smuggled across the border. As such, the amount of excess sugar may be up to 500,000-600,000 tonnes.
Meanwhile, high sugar inventory makes sugar price fall to the lowest price in many years, from VND18,000 – VND19,000 in 2011 to only VND12,000 – VND13,000 per kilogramme depending on the region, while the price of smuggled sugar in border areas remains at only about VND11,000 per kilogramme. The price of sugar decreased gradually over the years, which has pushed the sugar industry into a more difficult situation.
The only way to relieve the pressure on inventories of sugar is to count on the quota of sales to China. The MARD has asked the Ministry of Industry and Trade to grant licenses to export 400,000 tonnes of RE and RS branded sugar over the Chinese border to relieve inventories. Earlier, the Ministry of Industry and Trade had also allowed 200,000 tonnes of RS sugar exports from January to June 2014 to take advantage of this market like the way the rice industry is doing. The Vietnam Sugar and Sugar cane Association (VSSA) proposed being allowed unrestricted export of sugar of all quantities and types.
However, the Ministry of Trade and Industry calculates the amount of inventory sugar based on text documents while the VSSA based on the actual amount of inventory sugar from factories and actual consumption figures on the market, thus the MARD and the Ministry of Industry and Trade have yet to agree on the amount of residual sugar. It can be said that this is what makes the sugar industry face a deadlock.
According to the VSSA, there are three factors affecting the consumption of sugar industry. Particularly, in principle, the domestic demand for sugar is increasingly getting high. However, under the record by the MARD and the Ministry of Industry and Trade, for almost 3 years, the domestic demand for sugar has not increased (probably because of the long-lasting economic difficulty, consumers have to cut back on spending including the use of sugar products). Meanwhile the problem of smuggled sugar has not seen effective prevention measures.
Recently, the Prime Minister issued Decision 389 in replacement of Decision 127 on the establishment of the Central Steering Committee on Anti-smuggling and trade fraud led by Deputy Prime Minister Nguyen Xuan Phuc. Many hope this will have a positive impact on the fight against smuggling, especially that of sugar.
Meanwhile, the quota export is not always easy. China frequently changes policies and the two ministries themselves are not always consistent. Currently, congestion has made transportation strictly controlled while the Ministry of Transport regulates the transport load properly, which has pushed up shipping.
PV
Vietnamese
